Co-op Legal Services reports strong growth as it gears up for ABS application

By Legal Futures

31 March 2011

Co-operative Legal Services (CLS) continues to grow strongly, with income up nearly 20% in 2010, the Co-operative Group’s annual results have shown.

Meanwhile, a Co-op spokesman has confirmed to Legal Futures that CLS will apply for an alternative business structure (ABS) licence at the earliest opportunity, which could be as soon as August.

According to the 2010 financial statement released yesterday, CLS’s sales last year grew 19.2% to £24.2m, although profits were largely static at £3.9m, an increase of just £100,000 on 2009. CLS opened for business in 2006.

The figures do, however, mark a slowing down on 2009, when income went up 45% and profits more than doubled.

The statement said: “Our personal injury service has again performed well and has allowed us to extend our business-to-business proposition further with the development and launch of our accident management services.

“Other initiatives have included re-launching our personal injury and will-writing websites, together with continued support and development of our joint proposition with Life Planning. Our legal service business is currently growing rapidly thanks to great customer service and attractive rates and a strong range of personal injury, probate and will-writing services.”

The statement said the creation of a “wills and funeral planning proposition” had resulted in lead generations to CLS “that led to a marked increase in wills in the last quarter of the year”.

It said there would be “further developments in the joint Legal Services and Life Planning propositions and distribution process” this year.

During 2010, the Co-op ran a nine-week campaign promoting its legal services to food shoppers in its nationwide chain of 3,000 supermarkets by the use of in-store radio and animated till screen displays.

The Co-op spokesman said CLS will apply for an ABS licence “as soon as we can”, which could be 6 August on the Solicitors Regulation Authority’s current timetable ahead of the 6 October start date for ABSs. However, he said uncertainty about the application process, and particularly whether it will receive a licence and what the terms of that licence would be, means exactly how CLS will expand its offering is still up in the air.

He said the Financial Times was wrong to report earlier this week that the Co-op had decided to offer legal services through its network of 300 bank branches. “Everything’s on the table… and no decisions have been made,” he said.

The paper also quoted CLS chief Eddie Ryan as saying: “Some legal services will be done remotely over the phone and others done face to face and need to be done by acquiring or working in partnership with law firms.”

Legal Futures Blog

Last month, MPs on the justice select committee asked minister Lord Keen what would happen when the government went ahead with its plan to raise the small claims limit for personal injury claims (from £1,000 to £5,000 for road traffic related claims and to £2,000 for everything else). As it is a jurisdiction in which lawyers do not generally operate – because legal costs are not recoverable – who might help claimants navigate what can still be a complex process? His answer, surprisingly, was claims management companies.